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With an agreement among key farm bill negotiators finally in hand, the conference committee is expected to make swift work this week on the reauthorization of the five-year bill overseeing agriculture, conservation, energy and nutrition programs.

The committee will hold a formal conference meeting this evening, where they are expected to approve a new framework for funding and offsets for the bill that key House-Senate negotiators from the tax and agriculture panels agreed to late Friday.

Energy Harvest: Power From the Farm—An E&E Special Report

The new framework for the bill includes a $4 billion boost above the current baseline for conservation programs and $10.3 billion in new spending on nutrition.

Crop subsidies and reductions to a proposed disaster relief program took the brunt of the spending cuts to offset the new spending, lawmakers said.

The framework also includes a pared-down version of the Senate’s tax package that would roll back tax cuts for corn-based ethanol and give new tax breaks for the cellulosic ethanol and timber industries.

The leaders of the House and Senate Agriculture committees reached the agreement Friday after several days of intense closed-door negotiations in the Capitol. Lawmakers still have to work out some details of the $300 billion, five-year measure, but they said they expect a swift resolution of the conference this week.

“There were some tough spots, but we were able to get by all of that,” House Agriculture Chairman Collin Peterson (D-Minn.) said after meetings Friday. “Any member can offer any amendment [in the conference committee], but I don’t see a need for any votes—I think we’ve got this so it won’t require any of that.”

The agreement still must reach approval of the conference committee and the full House and Senate, as well as the White House. President Bush has held a hard line with the farm bill, threatening to veto it unless it reforms crop subsidies and avoid tax increases.

Bush administration officials were not present for the negotiations last week. A White House spokesman said they are reserving judgment until they can review the entire package.

“As we’ve said in the past, the president believes that a new farm bill should include important reforms, not raise taxes and be fiscally responsible,” said White House spokesman Scott Stanzel.

The leaders of the House and Senate tax panel agreed to rely on customs-users fees to offset much of the $10 billion in new spending for the bill. The fees, most of which would come from importers, do not classify as a tax and have not raised a red flag with the White House.

But other advocates for overhauling the farm bill are hopeful the White House will continue to press for more changes to the measure. Rep. Ron Kind (D-Wis.) said he hopes Bush “will stand firm in his commitment to a better bill.” Kind is one of the leaders of a group of House members pushing to throw out much of the current subsidy program.

“Negotiators managed to avoid every opportunity to reform wasteful, outdated subsidies while piling on additional layers of unnecessary spending,” said Kind. “It looks as though nothing has been done to address the waste and abuse that has been well documented over the last year.” No limits for farmers

One of the outstanding issues for the bill is limitations on crop subsidies—a controversial area where reformers like Kind would like to see more change.

Lawmakers said they are still working out a deal on income limits for crop subsidy recipients. Peterson said it would likely lower the cap for people who make most of their income off the farm, but have no limitation for on-farm income.

“The people who are going to take a big hit in the bill are non-farmers,” said Peterson.

Advocates for farm bill reform want to place more stringent limits on how much money landowners can receive in federal subsidies—regardless of where their income comes from.

The Bush administration proposed barring anyone who makes more than $200,000 per year from farm supports.

The Senate’s version of the farm bill, approved in December, would stop payments to non-farmers who make more than $750,000 a year. It had no income caps for farmers. The House bill would cut off farm payments for millionaire farmers or non-farmers who make more than $500,000. Both prompted veto threats from Bush. Corn gives way to cellulosic subsidies

The agreement also includes a package of tax incentives that totals close to $1.5 billion, according to members of the Finance Committee.

The package includes extensions and reductions of the ethanol tax credits and tariffs, said Sen. Charles Grassley (R-Iowa). The move is a step toward gradually transitioning the corn-ethanol industry to standing on its own. The package instead favors supports for cellulosic ethanol.

“It is a signal we are ready to shift to other less disruptive forms of ethanol production,” Senate Finance Chairman Max Baucus (D-Mont.) said of the package.

Corn-ethanol subsidies would see an almost 12 percent hit. The current 51-cent-a-gallon tax credit for corn-based ethanol would drop to 45 cents. In conjunction with that, it would also reduce the tariff on imported ethanol, Grassley said.

The winner in the tax package is cellulosic ethanol—made from corn stalks, woody plants or grasses. It would get a $1-per-gallon subsidy.

The move marks a significant shift for the farm-state lawmakers, who have been some of the biggest advocates for ethanol supports, and the booming grain and refinery industries that have come with them.

“This is a signal to the country that we’re starting to move away from corn to cellulose,” Peterson said. Sodsaver exemptions

The agreement includes protections for virgin prairie, long-sought from environmental groups, but has loopholes to allow some states to ignore them.

Conservation advocates have been pushing for years for a sodsaver program to bar federal subsidies for farmers who plow up native prairie.

The Senate sodsaver language, favored by conservation groups, would block crop insurance and disaster payments for farmers who plant on native prairie. The House bill limits the crop insurance ineligibility to four years.

The conference agreement has an “amalgam” of the House and Senate sodsaver provisions, Senate Agriculture Chairman Tom Harkin (D-Iowa) said Friday. All of the prairie pothole states would have to comply, but Montana and North Dakota would only opt in at their governors’ discretion.

Sodsaver is intended to address what conservation groups say is a backward system in current farm policy. The 2002 farm bill offers landowners conservation payments to conserve grasslands, but also gives crop insurance and crop subsidies that encourage plowing them up.

The Government Accountability Office issued a report this fall calling federal subsidies an “important factor” in encouraging the conversion of millions of acres of grasslands to row crops. The United States lost almost 25 million acres of privately owned grasslands between 1982 and 2003, GAO said. Conservation

The $4 billion increase for conservation trails the numbers negotiators had previously discussed, but still would give a significant boost to most farmland conservation programs.

Much of the conservation money would go to restore funding for programs that would otherwise expire under current law. The expiring Wetlands Reserve Program would get $1.3 billion above the 10-year baseline and the Grasslands Reserve Program would get $300 million.

The framework shifts almost $2.5 billion from the Conservation Reserve Program to other conservation programs—cutting down the Agriculture Department’s largest conservation program but infusing other working-lands programs with some of the money in its budget.

Lawmakers said it lowers the acreage cap for CRP to more closely reflect the reality of the program, which pays farmers to idle land.

The framework allots for 32 million acres in CRP. That total is less than the current limit of 39 million acres but still more land than most USDA officials expect to see in the program in the next several years. Enticed by high commodity prices, farmers have been taking some land out of the program, and USDA has held off on new open enrollments.

Other conservation programs would see a boost under the framework. The Environmental Quality Incentives Program would see a $2.4 billion increase over baseline levels, the Conservation Stewardship Program gets $1.1 billion, and the Farm and Ranch Land Protection Program gets $560 million. A new program for the Chesapeake Bay comes in at $372 million.

The Senate-House conference committee tasked with hammering out the five-year farm bill (H.R. 2419) had an original deadline of April 18 that was extended until today. After marathon sessions all week, negotiators have come close enough to a final package to give leadership confidence to grant a further one-week extension to next Friday, May 2.

Yesterday, Agriculture Secretary Ed Shafer said Bush would veto the farm bill if funding for the farm bill came from a requirement that stock brokers and mutual funds report the cost basis of securities sold by their clients, a tax loophole closure that was estimated to value $6.2 billion and was favored by House Ways and Means Chairman Charles B. Rangel (D-N.Y.). Negotiators decided not to test the veto and will instead raise funding through customs user fees.

Allison Winter for E&E News describes the deal:

The new framework for the bill includes a $4 billion boost above the current baseline for conservation programs, $10.3 billion in new spending on nutrition and new tax incentives for the timber and cellulosic ethanol industries. Crop subsidies and a proposed disaster relief program took the brunt of the spending cuts to offset the new spending, lawmakers said.

Catharine Richert reports for CQ Today:

House and Senate conferees have struck a long-awaited deal on the new farm bill.

The measure (HR 2419) will be worth about $570 billion over 10 years, with new funding for farm-related tax credits, a disaster aid program, and new funding for food stamps.

Those programs will in part be paid for by a $400 million cut to direct payments — a subsidy farmers get based on their acreage and the type of crop they grow — and a $250 million cut to a $4 billion disaster-aid fund.

But most of the offsets for the extra spending will come from extending customs user fees, a revenue-raiser favored by the Bush administration.

Nutrition programs would get a significant boost. Food stamps and food aid would top out at about $10.2 billion, up from an initial proposal of $9.5 billion.

Over the weekend, lawmakers will continue their discussions about preventing very wealthy farmers from collecting government subsidies. The conferees say they will have a conference report ready for House and Senate floor action by Monday.

Three of eleven titles were cleared by the farm bill (H.R. 2419) conference committee yesterday. The research, trade and credit titles are less controversial than ones remaining, as conferees come upon the Friday deadline for renewing the farm bill or filing for an extension. Allison Winter reports for E&E News that the conferees expect to ask for a short extension:

“A long-term extension is totally not acceptable to me,” said House Agriculture Chairman Collin Peterson (D-Minn.).

Senate Agriculture Chairman Tom Harkin (D-Iowa) said he plans to plow forward with marathon conference sessions this week, in the hope of reaching enough agreement to justify a short-term extension of current farm programs.

“The best outcome is if by Friday we have this done, but I don’t think that is going to happen,” Harkin told members of the conference committee today. He said he plans to ask for an extension of a “few days.”

A significant matter of dispute is the title that deals with tax incentives:

The tax package includes incentives for endangered species habitat, cellulosic ethanol, biodiesel and residential wind credits, among a host of other provisions. Farm bill conferees on the House side asked members today to strip it, while senators pleaded to keep at least some of the incentives, even if they are pared down.

“We feel like we are being held hostage by the Senate Finance Committee,” said House Agriculture ranking member Bob Goodlatte (R-Va.). “We’re concerned about jurisdictional issues and the total amount of money.”

In remarks to reporters after the meeting, Sen. Kent Conrad (D-N.D.) suggested lawmakers may cut about $1 billion from the tax title.

Two of the major farm bill (HR 2419/S 2302) amendments supported by reform advocates, the Lugar-Lautenberg subsidy overhaul (S 2228) and Dorgan-Grassley subsidy cap (S 1486), have both failed to achieve the sixty votes necessary to overcome Republican filibusters.

On Tuesday, Lugar-Lautenberg was soundly rejected by a vote of 37-58 (the five presidential candidates in the Senate did not vote).

This morning, the cloture vote to end debate on Dorgan-Grassley narrowly failed by a vote of 56-43.

The Senate is scheduled to consider the Farm Bill (H.R. 2419 with S.Amdt. 3500) and the energy bill (H.R. 6 with S.Amdt. 3841).

Under a unanimous consent agreement, all amendments to the farm bill were required to get 60 votes to end debate and be accepted.

In roll call vote 424, the Dorgan-Grassley amendment (S.Amdt. 3695) to the Farm Bill was rejected 56-43.

In roll call vote 425, cloture on the latest compromise version of the energy bill was rejected 59-40.

In roll call vote 426, the Klobuchar “means-testing” amendment (S.Amdt. 3810) to the Farm Bill was rejected 48-47.

The amendment, supported by the administration, would have limited subsidies to full-time farmers making less than $750,000 a year, and landowners whose primary income comes from outside the farm making less than $250,000 a year.

In roll call vote 427, the Tester-Grassley Competition Title packer price manipulation amendment (S.Amdt. 3666) to the Farm Bill was rejected 40-55.

The amendment, as explained by Tom Philpott:

Price manipulation is clearly prohibited by the Packers & Stockyards Act (PSA), but some judges have recently ruled that price manipulation is excused if a packer or processor can show “a legitimate business justification” for manipulating prices—such as gaining access to more livestock at the price they want to pay. This defense to price manipulation is not in the PSA and the court rulings, if allowed to stand, weaken the law substantially. The amendment filed by Senators Tester (D-MT), Harkin (D-IA), and Grassley (R-IA) will clarify that the PSA cannot be interpreted to include “a legitimate business justification” for market manipulation.

In today’s Washington Post, former president Jimmy Carter penned the op-ed Subsidies’ Harvest Of Misery, throwing his support behind major reforms to the farm bill (H.R. 2419/S 2302/SA 3500), namely the Lugar-Lautenberg (S 2228/SA 3711) and Dorgan-Grassley (S.1486/SA 3508/SA 3786) amendments, saying “Both amendments would go a long way toward making the farm bill fair for farmers at home and abroad.”

Lugar-Lautenberg (the FRESH Act) is a broadly supported reform bill that would replace the current subsidy system with a yield-based insurance system. Dorgan-Grassley places a $250,000 annual cap on individual subsidies.

Carter cites the current state of farm subsidies:

It is embarrassing to note that, from 1995 to 2005, the richest 10 percent of cotton growers received more than 80 percent of total subsidies. The wealthiest 1 percent of American cotton farmers continues to receive over 25 percent of payouts for cotton, while more than half of America’s cotton farmers receive no subsidies at all. American farmers are not dependent on the global market because they are guaranteed a minimum selling price by the federal government. American producers of cotton received more than $18 billion in subsidies between 1999 and 2005, while market value of the cotton was $23 billion. That’s a subsidy of 86 percent!

He goes on to say that the fragile agrarian economies of third-world Africa are dependent on exports harmed by the domestic subsidies.

A roll call vote is expected at about 9:20 am on the motion to invoke cloture on the energy bill as passed by the House of Representatives on December 6.

By a vote of of 53-42 the cloture motion failed.

The following Democrats voted against cloture:

• Bayh (D-IN)
• Byrd (D-WV)
• Landrieu (D-LA)

The following Republicans voted for cloture:

• Coleman (R-MN)
• Collins (R-ME)
• Smith (R-OR)
• Snowe (R-ME)
• Thune (R-SD)

The following Republicans voted against cloture but previously had voted for the earlier Senate version of H.R. 6, which included the CAFE standard, but not RES or the tax title:

• Corker (R-TN)
• Craig (R-ID)
• Crapo (R-ID)
• Domenici (R-NM)
• Ensign (R-NV)
• Lugar (R-IN)
• Sessions (R-AL)
• Specter (R-PA)
• Stevens (R-AK)
• Sununu (R-NH)

The following Republicans voted against cloture but previously had voted for energy tax provisions similar to those in the House version:

• Crapo (R-ID)
• Lugar (R-IN)
• Grassley (R-IA)
• Roberts (R-KS)

Following the vote, the chamber resumed consideration of the farm bill (HR 2419).

CQ reports that yesterday evening a bipartisan deal was struck on how to manage the farm bill debate. The deal limits the number of amendments evenly between parties at twenty each. The farm bill had been stalled before the Thanksgiving recess and is under a veto threat.

As Sen. Reid announced this morning on the Senate floor, Sens. Harken and Chambliss will be managing the amendment process. Votes on the amendments and the bill will take place on Tuesday, December 11.

Senate Democrats will hold a news conference to discuss the nutrition programs in the Food and Energy Security Act of 2007 (HR 2419 – Farm, Nutrition and Bioenergy Act of 2007) and the impact they will have on children’s health. The bill would expand access to the Fresh Fruit and Vegetable Program and increase funding, grants and research to growers of fruits, vegetables and other specialty crops. Contact: Jim Manley at 202-224-2939

Participants

• Sen. Tom Harkin (D-Iowa)
• Sen. Debbie Stabenow (D-Mich.)
• Sen. Bob Casey (D-Pa.)
• Sen. Sherrod Brown (D-Ohio)

Senate debate on the farm bill (HR 2419/S 2302/SA 3500) stalled yesterday when Republicans objected to a unanimous consent resolution that only germane amendments could be proposed. Reid responded by filling the amendment tree with germane amendments, including the Grassley-Dorgan amendment to limit farm payments (SA 3508) and the Lugar-Lautenberg FRESH Act (S 2228) as a substitute bill.

Also yesterday the White House announced its intentions to veto the Senate version of the farm bill (Harkin, S 2302/SA 3500), stating its opposition for budget accounting reasons, though its opposition to the kinds of subsidy reforms in the Harkin bill is also known.

If the farm bill is stalled through the Thanksgiving recess beginning at the end of next week, Reid said subjects the Senate may consider include:

• a repeal of the estate tax
• S-CHIP
• Iraq war amendments
• labor issues